Walt Disney Co (DIS): Results of Operations and Financial Condition
Walt Disney Co (DIS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 August 5, 2026 To Our Shareholders and the Broader Investment Community, Our strong fiscal Q3 results and reiterated full-year outlook reinforce our confidence that we are uniquely well positioned. Decades of IP investment have built deep fan connections that transla
How this was made
The 30-second read
Why it matters
Key trading inputs are the reiterated fiscal 2026 adjusted EPS growth expectations (with and without the 53rd week), Q4 segment operating income target, and a new/updated fiscal 2026 share repurchase target of at least $9B.
Market read
Guidance and capital return targets can drive repricing of DIS expectations immediately after the filing, especially for traders focused on adjusted EPS and buyback support.
What to watch
Free cash flow declined over the nine-month period, and the filing emphasizes non-GAAP measures; traders may discount adjusted EPS if cash conversion or GAAP profitability deteriorates.
Revenue increased 7% to $25,248 million, total segment operating income increased 21% to $5,555 million, and adjusted EPS increased 28% to $2.06.
Third-quarter revenue, income before income taxes, total segment operating income, adjusted EPS, operating cash flow and free cash flow all increased year over year, led by Experiences and Entertainment. The company reiterated its fiscal 2026 adjusted EPS outlook and raised its fiscal 2026 share-repurchase target to at least $9 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $25,248 million | – | 7% |
| Income before income taxesGAAP | $3,645 million | – | 14% |
| Total segment operating incomenon-GAAP | $5,555 million | – | 21% |
| Diluted EPSGAAP | $1.51 | – | (48)% |
| Diluted EPS excluding certain itemsnon-GAAP | $2.06 | – | 28% |
| Cash provided by operationsGAAP | $4,866 million | – | 33% |
| Free cash flownon-GAAP | $3,072 million | – | 63% |
| Entertainment segment operating incomeother | $1,680 million | – | 64% |
| Sports segment operating incomeother | $858 million | – | (17)% |
| Experiences segment operating incomeother | $3,017 million | – | 20% |
| Entertainment SVOD operating marginnon-GAAP | 13% | – | – |
| Nine months revenueGAAP | $76,397 million | – | 6% |
| Nine months income before income taxesGAAP | $10,705 million | – | 8% |
| Nine months total segment operating incomenon-GAAP | $14,758 million | – | 5% |
| Nine months diluted EPSGAAP | $4.12 | – | (33)% |
| Nine months diluted EPS excluding certain itemsnon-GAAP | $5.25 | – | 9% |
| Nine months cash provided by operationsGAAP | $12,515 million | – | (8)% |
| Nine months free cash flownon-GAAP | $5,735 million | – | (24)% |
| Nine months Entertainment segment operating incomeother | $4,116 million | – | 3% |
| Nine months Sports segment operating incomeother | $1,701 million | – | (14)% |
| Nine months Experiences segment operating incomeother | $8,941 million | – | 10% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| EntertainmentEntertainment SVOD revenue growth of 11% reflected subscription revenue growth of 15% relative to the prior-year quarter, driven by both rate and volume, with foreign exchange representing approximately 1%. | $11,345 million | – | 6% |
| SportsStrong ESPN viewership gains helped expand consumer reach. | $4,500 million | – | 4% |
| ExperiencesGrowth was driven by roughly 6% volume and 3% rate across the global portfolio, including 4% per capita spending growth at domestic parks. | $9,968 million | – | 10% |
| EliminationsThe increase was due to the Fubo and NFL Transactions. | $(565) million | – | (26)% |
Fiscal 2026 and Q4 fiscal 2026 outlook
- NoteFiscal 2026 adjusted EPS growth of approximately 12%, excluding the impact of the 53rd week.
- NoteFiscal 2026 adjusted EPS growth of approximately 16%, including the impact of the 53rd week.
- NoteQ4 total segment operating income of approximately $4.9 billion, including the impact of the 53rd week.
- NoteAt least $9 billion in share repurchases in fiscal 2026.
- NoteDouble-digit growth in adjusted EPS in fiscal 2027, excluding the impact of the 53rd week.
- NoteDouble-digit Entertainment SVOD operating margin for full-year fiscal 2026, excluding the impact of the 53rd week.
Capital returns
- We are now targeting at least $9 billion in share repurchases in fiscal 2026.
What drove it
- Toy Story 5 had surpassed $1 billion in global box office, and Toy Story merchandise helped deliver the strongest quarter of year-over-year growth in Consumer Products revenue in 20 quarters.
- Total Parks & Experiences revenue increased 10%, driven by roughly 6% volume and 3% rate across the global portfolio.
- A tariff refund of approximately $100 million contributed roughly four points of Experiences segment operating income growth.
- Entertainment SVOD subscription revenue increased 15% relative to the prior-year quarter, driven by both rate and volume.
- Entertainment SVOD advertising revenues increased 3%.
- Strength at domestic parks, Disney Cruise Line, Consumer Products and Disneyland Paris offset softness at Asia parks.
Concerns
- Diluted EPS decreased 48% to $1.51 from $2.92.
- Sports segment operating income decreased 17% to $858 million from $1,037 million.
- Entertainment SVOD advertising revenues faced a softer overall demand environment relative to fiscal Q2 because of continued marketplace supply growth.
- Softness at Asia parks is expected to continue in fiscal Q4.
- Star Wars: The Mandalorian and Grogu and the live action Moana underperformed box office expectations.
- Nine-month cash provided by operations decreased 8% and nine-month free cash flow decreased 24%.
What to watch
- Q4 total segment operating income guidance of approximately $4.9 billion, including the impact of the 53rd week.
- Whether Asia parks softness continues in fiscal Q4 as expected.
- The sustainability of double-digit Entertainment SVOD operating margin for full-year fiscal 2026, excluding the impact of the 53rd week.
- Planned expansion to roughly triple the number of local original series on Disney+ across the next three years.
- Execution against the fiscal 2026 share-repurchase target of at least $9 billion.
Balance sheet and cash flow
- Cash provided by operations was $4,866 million for the quarter ended June 27, 2026, compared with $3,669 million for the quarter ended June 28, 2025.
- Free cash flow was $3,072 million for the quarter ended June 27, 2026, compared with $1,889 million for the quarter ended June 28, 2025.
- Cash provided by operations was $12,515 million for the nine months ended June 27, 2026, compared with $13,627 million for the nine months ended June 28, 2025.
- Free cash flow was $5,735 million for the nine months ended June 27, 2026, compared with $7,519 million for the nine months ended June 28, 2025.
Analysis
Disney reported broad third-quarter growth. Revenue increased 7% to $25,248 million, income before income taxes increased 14% to $3,645 million, and total segment operating income increased 21% to $5,555 million. Adjusted diluted EPS increased 28% to $2.06, while GAAP diluted EPS decreased 48% to $1.51. The filing states that total segment operating income modestly exceeded prior guidance.
Experiences was the largest contributor to profit growth. Segment revenue increased 10% to $9,968 million and segment operating income increased 20% to $3,017 million. The company cited roughly 6% volume growth and 3% rate growth across the global portfolio, along with 4% per capita spending growth at domestic parks. Approximately $100 million in tariff refunds added roughly four points to Experiences operating-income growth, while domestic parks, Disney Cruise Line, Consumer Products and Disneyland Paris offset Asia parks softness.
Entertainment revenue increased 6% to $11,345 million and segment operating income increased 64% to $1,680 million. Entertainment SVOD revenue increased 11%, with subscription revenue up 15% through rate and volume gains. SVOD advertising revenue increased 3%, but the company described a softer demand environment relative to fiscal Q2 amid continued marketplace supply growth. The 13% SVOD operating margin also benefited in part from the timing of marketing and programming spend. Sports revenue increased 4% to $4,500 million, but segment operating income declined 17% to $858 million.
Cash generation strengthened in the quarter, with cash provided by operations increasing 33% to $4,866 million and free cash flow increasing 63% to $3,072 million. The nine-month comparisons were weaker, however: cash provided by operations decreased 8% to $12,515 million and free cash flow decreased 24% to $5,735 million. Capital allocation is more aggressive, with the company now targeting at least $9 billion in fiscal 2026 share repurchases.
Management reiterated its fiscal 2026 adjusted EPS growth expectations of approximately 12% excluding the 53rd week and approximately 16% including it. It expects Q4 total segment operating income of approximately $4.9 billion, including the 53rd week, and continues to expect double-digit adjusted EPS growth in fiscal 2027 excluding the 53rd week. Key reported risks for the next quarter are continuing Asia parks softness, softer SVOD advertising demand, and the comparison effects of the 53rd week.
Not in the filing
stated, not guessed- Gross margin
- Operating expenses
- Tax rate
- Net income
- Cash balance
- Debt balance
- Dividend amount or dividend guidance
- Prior-quarter comparisons for reported quarterly metrics
- Segment operating-income margins other than Entertainment SVOD operating margin
- Entertainment SVOD revenue dollar amount
- Consumer Products revenue dollar amount
- Domestic parks revenue dollar amount
- Prior outlook section or prior-release guidance figures for formal actual-versus-prior-guidance comparisons
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is a Disney SEC Form 8-K (Item 2.02) with an earnings release exhibit covering fiscal Q3 results and forward outlook.
Ticker impact
Disney reported fiscal Q3 results and reiterated full-year outlook, including adjusted EPS growth targets and a $9B+ share repurchase plan.
Near-term bias to the upside if the market focuses on reiterated adjusted EPS growth and the $9B+ buyback target, despite GAAP EPS decline.
The filing includes specific quarterly and full-year financial metrics (revenues, segment operating income, adjusted EPS) plus explicit forward outlook and repurchase targeting, which can directly re-anchor expectations.
Market effects
Reinforces demand and monetization momentum in media content and DTC streaming, potentially affecting sentiment toward entertainment peers.
Limited direct regional read-through; guidance is company-wide and global guests/streaming are cited.
Global box office, Disney+ streaming hours, and EMEA programming ramp are referenced, which can influence international media sentiment.
Counterpoint
GAAP diluted EPS fell sharply year over year, so the stock reaction may be muted if investors prioritize GAAP earnings quality over adjusted metrics.
Key entities
- issuerWalt Disney Co
Subject of the SEC 8-K, reporting Q3 fiscal 2026 results and reiterated outlook plus share repurchase targeting.
